One of the new post-grant review procedures under the AIA is a transitional program for challenging covered business method patents. The procedure went into effect Sept. 16, 2012, and is scheduled for repeal on Sept 16, 2020.

The CBM procedure will allow a party that has been sued on a business-method patent or would otherwise have standing to seek declaratory judgment against the patent, to seek a review of the patent by the newly created Patent Trial and Appeals Board (PTAB). For purposes of post-grant review, a “covered business method” has claims to a method or apparatus for performing data processing or other operations used in practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions. As a general rule, CBM patents are likely to have been assigned to class 705. The procedure applies to any CBM patent, regardless of when it was filed or issued.

To institute a PGR of a CBM patent, the petitioner must demonstrate that it is more likely than not that at least one of the claims being challenged is unpatentable, and if instituted, the trial proceeds only against those claims for which this threshold has been established. A CBM review may be requested at any time for a patent issued under first-to-invent provisions, but can be requested only after the 9-month period for post-grant review for a patent subject to the first-to-file provisions. The petitioner may challenge a patent on any grounds, but prior art for challenged patents having an effective filing date prior to March 16, 2013 will be defined by pre-AIA 35 U.S.C. §102.

The Board, at the time it decides to institute a CBM trial, will set out a Scheduling Order for taking discovery. The types of discovery permitted will generally be considered under a “good cause” standard for information reasonably required to respond to the grounds raised by the opponent.

A CBM patent review is required to be completed within 1 year of institution. Where a CBM review is instituted and not dismissed, the PTAB shall issue a final written decision that addresses the patentability of any challenged patent claim and any new claim added via amendment during the CBM review. A party dissatisfied with the final written decision in a CBM review may appeal to the Federal Circuit.

After the PTAB renders a final decision, a petitioner may not request or maintain a subsequent proceeding before the PTO with respect to any claim on any ground raised or reasonably could have been raised in the covered business method review. A petitioner may not assert in a subsequent district court or ITC action that a claim is invalid on any ground that the petitioner raised.

The AIA expressly allows courts to stay litigation during the CBM review and includes a four-factor test for determining whether a stay will "reduce the burden of litigation on the parties and on the court." The inquiry examines:

  1. whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
  2. whether discovery is complete and whether a trial date has been set;
  3. whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
  4. whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

When enacting the America Invents Act, Congress contemplated that "the entire purpose of the transitional program at the PTO is to reduce the burden of litigation" and that the four-factor test was intended to "place a very heavy thumb on the scale in favor of the stay."

Additional details may be found at: